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FM asks cement makers to come out with proposal on price cut

Finance Minister P Chidambaram on Thursday asked cement manufacturers to cut prices, claiming that a section of them was keen to cooperate with the government in this regard.

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Updated at 1:16 pm

NEW DELHI: Finance Minister P Chidambaram on Thursday asked cement manufacturers to cut prices, claiming that a section of them was keen to cooperate with the government in this regard.

"We have information how much cement makers' sales have increased. How much your PBT has increased. How much your PAT has increased. So you should come forward with some proposals on moderating cement prices," Chidambaram said after meeting with a delegation of cement companies.

The Finance Minister had called cement manufacturers for the second time after the Budget, which imposed dual excise duty structure on cement to rein in prices.

The budget hiked excise duty to Rs 600 a tonne from Rs 400 if cement is sold higher than Rs 190 a 50 kg of bag and reduced it to Rs 350 a tonne if it is sold up to Rs 190.

But the move failed as cement makers hiked prices by up to Rs 12 per 50 kg bag.

Relying his hope on a sober section of the industry, Chidambaram asked them to cooperate with the government to fight with inflation, which has touched 6.46 per cent for the week ended March 3 with cement prices increasing at the rate of 4.4 per cent.

"I get the impression there are both views in the industry. One is more sober view that we must help the government control inflation. The other view seems to be more hawkish," he said.

"It is my hope they will discuss among themselves and come back with some proposals to the government. I have asked industry secretary to keep in touch with them, if they have any proposals," he added.

Chidambaram said both the government and the industry know how much prices have increased since December 2005.

"What were the prices in December 2005, January 2006, June 2006 and December 2006? I told the industry that you have this information. We have this information," he said.

The budget based its dual excise duty structure on the prices prevailing at maximum retail price of Rs 190 a 50 kg of bag in the month of February last year.

Cement manufacturers, however, refused to make any comment.

"I don't have any comment to make at this point," Cement Manufacturers Association (CMA) president Manoj Gaur, who led the delegation, said after the meeting.

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